Estimated Local New Orders: New orders - New Export Orders = 1.6 - (-2.3) = 3.9
Estimated Local Material: Inventories - Imports = (-2) - (-1.5) = -0.5
The producer prices spiked (+6.8) because of the high diesel prices which was caused by President Trump and this would show up in the CPI later due to the high tranport and machinery costs.
The recent GDP growth had indicated that there were some frontloading of purchases and this PMI also had corroborated the phenomenon through the estimated local new orders (Est'd +3.9) and new orders (+1.6).
The producers reduced their production (-1.6) in anticipation of the weakening economic growth caused by the high inflation. However, the producers increased their hring their employment (+1.5) because of hiring difficulties. Consequently, the inventories also fell (-2) due to the production reduction.
Furthermore, the production delince also caused the customers' inventories to be reduced (-1.2) and the backlog orders to increase (+4.6).
In view of the above factors, the PMI only decreased marginally to 54.5 (-0.01). The report doesn't bode well for the US economy because there is no significant increase in production to meet the upcoming festival shoppings as the high inflation is eroding consumer spendings.
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